The Loonie trades to a yearly high 1.2901 after reversing ahead of the 200-Day SMA (1.2578), and the exchange rate may continue to retrace to the 2021 high as the US Dollar gains on the back of the Russia-Ukraine conflict.
Meanwhile, the update to the CPI may fuel a further advance in USDCAD as the headline reading is expected to increase to 7.9% from 7.5% in February, which would mark the highest reading since 1982, with the core rate of inflation anticipated to show a similar dynamic.
Proof of persistent inflation may keep the Federal Reserve on track to normalize monetary policy over the coming months, and it remains to be seen if Chairman Jerome Powell and Co. will adjust its exit strategy at the next interest rate decision on March 16 as the central bank is slated to release the updated Summary of Economic Projections (SEP).
So far, advancements coming out of the US may keep USDCAD submerged as the Federal Open Market Committee (FOMC) prepares to shift gears, and a further appreciation in the exchange rate may fuel the recent flip in retail sentiment like the behavior seen during the previous year.
Looking forward today we have the Crude oil inventories and the US JOLTS Job Openings.
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